2016 (3) TMI 936 - AT - Customs

Sustainability of enhancement of value done under Rule 5 of the Customs Valuation Rules, 1988 - Import of medium density fiber boards - Transaction value under Rule 4 ibid rejected - Value enhanced on the basis of value noted for contemporaneous imports - Held that - the learned counsel placed on record a bill of entry filed at Chennai where the same value was declared and was accepted by the Customs.Also, there are number of contemporaneous imports at higher values, but the details of those contemporary imports have not been disclosed. Moreover, the observation in the order-in-original that the contemporary imports varied from USD 160/- to USD 220/- per CBM, but the adjudicating authority has ignored the evidence produced by the appellant that the value of USD 130/- and USD 140/- were also accepted by the Customs. Moreover, the copies of bill of entry and invoices relied upon by the adjudicating authority were not supplied to the appellant. The names of the importers are also missing; the quantity is not mentioned and the size, grade and quality are also absent. The unit price which is the most important factor is missing and, therefore, the order of the adjudicating authority is completely weak and not reliable. Also, no evidence led by the Revenue to counter the values declared by the appellant. Therefore, by considering the various case laws, the value of per CBM declared by the appellant as USD 130/- should be accepted as the transaction value. Consequently, the enhancement of the value made by the lower authorities is not sustainable in law. Decided in favour of appellant with consequential relief

Summary

Issues:
- Dispute over the declared value of imported goods
- Application of Customs Valuation Rules, 1988
- Comparison with contemporaneous imports
- Reliance on legal precedents for determining transaction value

Analysis:
The appeal concerned a dispute regarding the declared value of imported medium density fiber boards. The appellant imported two consignments from a Malaysian supplier, with the declared value at USD 130/- per CBM. The Customs enhanced the value to USD 180/- per CBM, leading to a duty dispute. The appellant contended that the transaction was at arm's length, supported by an irrevocable Letter of Credit, and the declared value was negotiated based on international trends. The appellant provided evidence, including the manufacturer's invoice and past Customs acceptance of values. The Commissioner (Appeals) upheld the enhanced value, citing contemporaneous imports at higher values.

The Customs Valuation Rules, 1988 were applied, specifically Rule 5, which mandates the lowest value among multiple values to determine imported goods' value. The Tribunal noted discrepancies in the Customs' handling of contemporaneous import values, as details were not disclosed, and relevant evidence was ignored. The appellant's evidence, such as bill of entry and invoices, was not fully considered, lacking crucial details like importers' names, quantity, and unit price. The Tribunal found the adjudicating authority's order weak and unreliable due to these deficiencies.

Legal precedents were cited by the appellant to support their argument that the declared value should be accepted as the transaction value when found genuine, despite higher contemporaneous imports. The Tribunal concurred, emphasizing that the value considered for comparison should be the declared value without departmental loading. Notably, the Revenue failed to provide evidence countering the appellant's declared values. Consequently, the Tribunal allowed the appeal, setting aside the enhanced value determination and providing consequential relief as necessary.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of genuine transaction values and proper application of Customs Valuation Rules. The decision highlighted the need for transparency and consistency in evaluating imported goods' values, ultimately upholding the appellant's declared value of USD 130/- per CBM.